11 July, 2016

A euro-circus in absolute lunacy!

While plenty
of alarms have been activated around the German banking super-giant
Deutsche Bank, which recently was described also by the IMF as "the greatest
systemic risk to the global financial system", a Bank's
expert claimed that the European banking system and especially the
Italian banking system are in trouble!

Furthermore,
presumptuously said that the banks should be bailed-out with more
billions at the expense of the European taxpayers!

"In
Europe, the bailout does not need to be so large. A €150 billion
program should be enough to help European banks recapitalize,"
said David Folkerts-Landau. He adds that the decline in bank
stocks is only the symptom of a much larger problem, namely a
fatal combination of low growth, high debt and a "dangerous"
deflation.

"Europe
is seriously ill and needs to address very quickly the existing
problems, or face an accident," said the chief economist.

The
Deutsche Bank expert said he is particularly worried about Italy
and the condition of local banks, where the €40 billion in
funding needs is said to be "conservative." He said that
the bank bailout is so urgent that it should permit Europe to
violate the bail-in rules of the new Banking Directive. The
economist notes that such a bail-in is not doable and is
politically unfeasible because it would hit people's savings and
may cause a bank run in both Italy and elsewhere. We find it
strange how nobody thought of this before the rules were
implemented, or rather how impairing savings was only a problem
when "second-rate" European citizens such as those in
Cyprus and Greece were affected. Now that Italians and even
Germans are in the cross hairs, suddenly "it is time to
change the rules."

[...]

Our
only question is whether Deutsche Bank's chief economist is more
worried about the future of Italy's banks, or that of his own
employer.

In the meantime, we look forward to
the next pan-European bank bailout, now that even Germany's
biggest bank has thrown in its support behind the proposal, which
means Merkel and Schauble's resistance will promptly evaporate in
the coming days as insolvent banks across Europe once again get
rescued by taxpayers, in the process further escalating populist
anger at the treatment of banks, leading to more Brexit-like
events and the further fragmentation of Europe.

It is
obvious that the current euro-circus, a Frankenstein creation
consisted of political puppets, corrupted politicians, technocrats,
lobbyists and bankers, has completely lost common sense.

At the time
when the euroship is going straight to the iceberg, this peculiar
mixture of sociopaths appears to be in absolute confusion, without
showing any signs of returning to sensible thinking. So far:

Greece
has been forced to continue implementing the neoliberal policies
that for six years now are destroying the economy.

Even
after Brexit and the unprecedented rise of euroscepticism, the
German sado-monetarists
demand more pain and iron discipline from the member states.

Experts
from the greatest systemic risk
to the financial system simply ignore this risk and try to direct
attention to the rest of the European banking system which indeed is
in trouble too.

The
bankers request bail-out, thus more money from the taxpayers and the
states, when at the same time demand further deregulation, thus minimum state interference.

The
bankers request defiance of the rules, like the bail-in, at the same
time when their political puppets impose sado-monetarism demanding
from the member-states absolute commitment to the "rules".

Who will be
those that may jump out of the ship before the collision with the
iceberg? It seems that this is the only question for which we should
seek an answer right now.